30th September 2023 – (Hong Kong) Huawei surprised the smartphone industry last month by quietly launching online presales campaigns for its new flagship Mate 60 Pro and Mate 60 Pro+ handsets. Powering the devices is a new 5G central processing unit (CPU) identified as the Kirin 9000s and developed internally by Huawei’s chip design unit HiSilicon.
The timing of the presales coincided with a visit to China by U.S. Commerce Secretary Gina Raimondo. But it was the use of the new processor that sparked intense speculation, as teardowns indicated it was fabricated by China’s top contract chipmaker Semiconductor Manufacturing International Corporation (SMIC). This prompted questions for the U.S., as SMIC is sanctioned over its use of American technology.
Both Huawei and SMIC have declined to comment on the mainland-produced system-on-a-chip. However, Chinese social media erupted in patriotic fervor, hailing the new smartphones and CPU as defying tough US restrictions. Many saw it as emblematic of China’s technological prowess.
Huawei’s return to 5G smartphones represents a major PR win after founder Meng Wanzhou’s release from house arrest in Canada, where she fought extradition to the US in a bank fraud case. Her ordeal was seen in China as resisting American hegemony.
Early sales figures have exceeded expectations. Jefferies analyst Edison Lee estimates over 2 million Mate 60 Pro units sold since late August, while the foldable Mate X5 based on the same processor has also sold out. Boosted by popularity, Huawei raised its 2022 shipment target by 20%.
Many questions surround production of the Kirin 9000s CPU. While SMIC is the likeliest candidate, some analysts suggest Huawei may have produced it in-house or adapted SMIC’s 14nm process. Either scenario would challenge US restrictions on exporting advanced chipmaking equipment to China.
Huawei has scrambled to adapt amid sanctions, replacing over 13,000 components with local alternatives. Founder Ren Zhengfei says $17 billion was invested annually to develop substitutes like HarmonyOS. Self-sufficiency remains elusive for some components however, with suppliers including Japan’s Murata and US-based GlobalFoundries.
Continued access to foundry partners like SMIC and SK Hynix, which supplied the Mate 60 Pro’s memory, will determine Huawei’s competitiveness. Sustaining momentum against Android and iOS challengers requires ecosystem strength alongside reliable supplies.
The CPU controversy has reignited debate in Washington on further curbing Huawei and SMIC. However, new restrictions face pushback from industry and risks harming bilateral ties. For now, Huawei seems assured of its market position at home, though global ambitions hinge on navigating sanctions creatively. Its resurgence underscores both Chinese innovation and the policy trade-offs in containing strategic competitors.